East Texas Fire Ins. Co. v. Brown

• Decision Date: 22 December 1891
• Parties: EAST TEXAS FIRE INS. CO. v. BROWN.
• Court: Texas Supreme Court

18 S.W. 713

EAST TEXAS FIRE INS. CO. v. BROWN.

Supreme Court of Texas.

December 22, 1891.

Commissioners' decision. Section B. Appeal from district court, Smith county; FELIX J. McCORD, Judge.

Action by George G. Brown against the East Texas Fire Insurance Company upon an insurance policy. Plaintiff obtained judgment, and defendant appeals. Reversed.

Whitaker & Bonner, for appellant. H. Chilton, for appellee.

TARLTON, J.

The following statement from appellant's brief will sufficiently indicate the nature of this action: "This suit was filed by plaintiff, Brown, to recover of the defendant, the East Texas Fire Insurance Company, the value of a certain insurance policy issued to one T. B. Sage on a frame flour-mill and machinery, situated in Brownstown, Ill. The defendant pleaded: (1) General denial; (2) that proofs of loss, as required by the policy, were not furnished within a reasonable time; (3) that the property was incumbered; (4) that the property insured was situate on leased ground. In response to defendant's pleas, plaintiff, in a supplemental petition, alleges: (1) That the policy was procured through one Benjamin Kimball, of Saint Louis, who, they allege, was defendant's agent, by one J. R. Timberman, who was acting as the agent of Sage, the assured; that Timberman man made no written application, but that at the time he applied for the insurance he informed Kimball of the incumbrance and the lease; that Kimball did not ask for or require a written application; that the assured did not know of the terms or conditions of the policy until the same was delivered to him by Kimball; that he paid Kimball the amount of the premium at the time he made the application, and no more; and that defendant paid to Kimball his compensation as agent for placing the insurance. (2) That proofs of loss were made up immediately after the fire, under the directions contained in the policy, and under the direction and supervision of adjusters representing defendant and other companies, at the place of the fire, and were furnished to the adjusters within ten days after the fire, who then and there made a full investigation concerning the fire; that defendant, until it filed its second amended original answer, never made any objection to the form or substance of the proofs, and never before claimed that they were not filed within a reasonable time; that at the time of the adjustment, and after full investigation, the adjusters informed Sage and plaintiff that defendant would not pay the loss, without giving any reason for such refusal; wherefore he says the company has waived the filing of proofs within a reasonable time. The case was tried on February 17, 1890, and resulted in a verdict and judgment for plaintiff, from which defendant presents this appeal."

Appellant first assigns as error the following portion of the court's charge: "As heretofore stated, the property being mortgaged by Sage to Brown at the time of issuing the policy would defeat the recovery on the policy unless at the time said Sage procured the policy he, or his agent, Timberman, expressly informed Kimball, at the time, of such incumbrance. Now, if he or his agent did inform Kimball that the property was incumbered, and Kimball or his agent made an application to defendant company, said application having the questions to be answered printed upon it in regard to the property being mortgaged, and they were not answered, and the defendant company accepted such application with these questions unanswered, and issued the policy, the defendant company is presumed to have waived the conditions, and is therefore liable. That is, gentlemen, whether Kimball was or was not an agent of defendant company, if he or his agent forwarded an application to defendant company, with questions as to incumbrances on the property unanswered, and the defendant company issued the policy without further inquiry, it will be deemed that the conditions of the policy were waived by defendant company, provided there was no effort to conceal the true facts about the condition of the property by Sage." Among the grounds of error urged with reference to this instruction are the following: (1) The charge assumes that Kimball was the agent of the defendant company when the information referred to was given him by Timberman, and was hence a charge upon the weight of the evidence. (2) The charge with reference to a waiver by defendant of the conditions of the policy, growing out of the making of an application, and the failure to answer questions therein contained in regard to an incumbrance, was without support in the pleadings of plaintiff. The policy in this case stipulates that "the assured, by the acceptance of this policy, hereby warrants * * * that there is no mortgage, trust-deed, or lien upon the property insured, or any part of the same, unless it be expressly stated in the written part of this policy, or the written application for this insurance." The company alleged the existence of a mortgage upon the property insured, and relied upon this warranty to shield itself against liability on the policy. The plaintiff, in avoidance of this plea, replied solely that the company was precluded from setting up this defense, because full information was given before the issuance of the policy of the existence of the mortgage to Kimball, the agent of the company. If Kimball was in fact the agent of the company, and had information of the existence of the mortgage, the company would be bound by such information imparted to him, acting within the real or apparent scope of his authority; and it could not subsequently so stipulate in the policy as to avoid the effect of the information. Wood, Ins. 628, 666-668. Mechem, Ag. § 931; Insurance Co. v. Ende, 65 Tex. 118. The materiality of the inquiry whether Kimball was or was not the agent of the company is therefore evident. The witness Timberman testified for the plaintiff on this subject that "he had received a card or circular from Mr. Benjamin Kimball, stating that he could place insurance with companies known as `non-board companies' at lower rates than insurance could be placed with regular board companies. Witness called at the office of Mr. Kimball, who stated to witness that he represented a number of reliable companies, and that he could place the insurance for witness, (who was acting for Sage, the assured.) Kimball's conversation lead witness to believe that he was the agent of these companies. Kimball in fact acted throughout the entire transaction as the representative and agent of the defendant company. The contract was made with Mr. Kimball as the representative of the East Texas Fire Insurance Company. * * * All that witness knows about Kimball's representing the East Texas Fire Insurance Company is that he told...